Vestmark says that it will benefit from the scale and resources offered by wealth tech platform Envestnet, which last week agreed a deal to acquire the portfolio management and trading technology provider.
“Just given the fact of their size and their capitalization, we’re going to have a much larger war chest, if you will,” said Steve Gottschalk, Vestmark’s vice president of marketing, told InvestmentNews at the Future Proof festival in Huntington Beach, Calif.
“Investment from Envestnet will accelerate roadmaps at Vestmark,” added Freedom Dumlao, Vestmark’s chief technology officer and chief AI officer.
In the statement that announced the acquisition last week, Envestnet and Vestmark said that they will each continue to invest and execute existing product roadmaps for key products such as VestmarkONE and Vestmark’s VAST outsourced portfolio management service, as well as Envestnet Enterprise, Tamarac, and MoneyGuide.
At the time of its multi billion-dollar take-private deal with Bain Capital in 2024, Envestnet had a market cap of $3.49 billion, according to stockanalysis.com.
Envestnet has $8 trillion platform assets, while Vestmark supports more than $2 trillion in assets and five million-plus accounts.
Terms of Envestnet’s acquisition of Vestmark have not been disclosed, although the deal is expected to close in the fourth quarter.
Unsurprisingly, AI is also looming large for both companies. “There is a deep interest in both firms and AI to improve our clients’ ability to execute on their own missions,” Dumlao told InvestmentNews. “The conversations that we have had preliminarily show that there is alignment in the way that we approach those things.”
“I would expect to see more investment and acceleration in those capabilities,” he added. In particular, Dumlao pointed to Vestmark’s Pulse AI solution for wealth managers that was launched in May.
Already one of the biggest topics in the wealth management industry, AI was thrust even further into the spotlight at Future Proof. On Monday AI heavyweight Anthropic launched Claude for Financial Advisors and partnerships with a slew of big names in the wealth management industry, such as Dynasty Financial and Charles Schwab. The move won plaudits from financial advisors attending Future Proof.
During an interview at Future Proof, Gottschalk also vowed that the acquisition by Envestnet will not cause disruption to Vestmark’s customers. “Our existing clients don’t have to change, there’ll be no forced migrations,” he said.
“We’re super optimistic about the future because this new firm is going to be a unique firm in the wealth tech area,” Gottschalk added, highlighting the ‘cradle to grave’ support that can now be provided to customers.
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